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Monthly Archives: May 2016

District 3 of the Wisconsin Court of Appeals issued a decision yesterday, May 24, reinstating Wisconsin’s right to work law pending appeal of a Dane County Circuit Court Judge’s decision finding the law to be unconstitutional. The Court of Appeals held that the Circuit Court erred in not granting a stay pending the appeal of the decision.

The decision means that unions and employers are again unquestionably prohibited from entering into agreements requiring union membership as a condition of employment. Wisconsin was the 25th state to enact a so-called right to work statute. Under the law, as contracts expire, are extended or are amended after March 11, 2015, the parties are precluded from maintaining or agreeing to contract language requiring employees to be members of a union.

It is anticipated the case will find its way to the Wisconsin Supreme Court. Given that Court’s 5 to 2 conservative majority, we expect the law will ultimately be upheld.

The U.S. Department of Labor issued its much-anticipated final overtime exemption rule on May 18, 2016, raising the minimum salary threshold required to qualify for the Fair Labor Standards Act’s (FLSA) “white collar” exemptions to $47,476 per year ($913 weekly). The new salary test will apply to all administrative, professional, executive, outside sales and computer employees who are treated as exempt and salaried under the FLSA. This new rule will affect approximately 4.2 million U.S. workers who are currently treated as exempt, but who would not satisfy the new salary test under the FLSA.

The rule has been a long time coming. The first version of the new rule was proposed in June 2015 and drew approximately 300,000 public comments between June and September 2015. That first version of the rule would have more than doubled the salary threshold from $23,660 per year ($455 weekly) to $50,440 per year ($970 weekly). The final rule just issued still doubles the salary threshold, but reduced the proposed salary threshold by approximately $3,000. The rule will take effect on December 1, 2016.

Under previous regulations, employees had to meet certain tests related to job duties and be paid at least $23,660 per year ($455 weekly) on a salary basis to be exempt from the minimum wage and overtime requirements under the FLSA. While DOL’s final rule raises the salary level significantly, non-discretionary bonuses and incentive payments can now count for up to 10 percent of the new salary level, provided the payments are made at least quarterly. This change has been viewed by some commentators as DOL “throwing employers a bone” in the final rule. In addition, this new salary threshold will be automatically updated every three years to ensure it stays at the 40th percentile benchmark, according to the Obama administration. The final rule also raises the overtime eligibility threshold for “highly compensated” workers from $100,000 annually to $134,004 annually.

Employers have a range of options in responding to the updated standard salary level. For all employees who are currently treated as exempt under the FLSA’s “white collar” exemptions, but who are paid less than $47,476 per year ($913 weekly), the following options exist:

Increase the salary of the employee to at least the new salary level to maintain his or her exempt status;

Convert the salary to an hourly rate and pay the overtime premium (one and one-half times the employee’s regular rate of pay) for all hours worked in excess of 40 hours in a week;

Control, reduce or eliminate overtime hours;

Reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) in order to account for overtime hours worked in excess of 40 hours (paying employee time and one-half for all overtime hours), to hold total weekly pay constant; or

Use some combination of these responses.

In determining which course of action to utilize, employers should analyze their workforce and determine which solution best suits their particular needs. For salaried, exempt employees who regularly work overtime and currently earn slightly below the new standard salary level, employers may be best suited to raise the employees’ salaries to the new salary level to retain the “white collar” exemption. For employees who rarely or almost never work overtime hours, employers may be best suited to start treating those employees as non-exempt, pay the employees a standard hourly rate, and pay the overtime premium when necessary.

If you have questions about this material, please contact Oyvind Wistrom by email at owistrom@lindner-marsack.com or by phone at (414) 273-3910, or any other attorney you have been working with here at Lindner & Marsack, S.C.

Employers that have endured the Equal Employment Opportunity Commission’s charge process concerning allegations of discrimination, harassment or retaliation know that an effective, persuasive position statement responding to a charge is critical to securing a successful outcome. For years, employers could be assured that the EEOC would not share its position statement or attachments with a charging party. In doing so, this procedure complied with Section 709(e) of Title VII, which provides:

It shall be unlawful for any officer or employee of the Commission to make public in any manner whatever any information obtained by the Commission pursuant to its authority under this section prior to the institution of any proceeding under this subchapter involving such information. Any officer or employee of the Commission who shall make public in any manner whatever any information in violation of this subsection shall be guilty of a misdemeanor and upon conviction thereof, shall be fined not more than $1,000, or imprisoned not more than one year.

EEOC has implemented nationwide procedures that provide for the release of Respondent position statements and non-confidential attachments to a Charging Party or her representative upon request during the investigation of her charge of discrimination. … These procedures apply to all EEOC requests for position statements made to Respondents on or after January 1, 2016. … The new procedures provide for a consistent approach to be followed in all of EEOC’s offices, which enhances service to the public. The procedures will also provide EEOC with better information from the parties to strengthen our investigations.

In contrast to this new practice, the Commission will not share the charging party’s position statement with the employer. While the Commission has recognized that employer EEO-1 reports are confidential under Section 709(e) (“[a]ll reports and information from individual reports will be kept confidential, as required by Section 709(e) of Title VII. Only data aggregating information by industry or area, in such a way as not to reveal any particular employers statistics, will be made public.”), it has not explained this new interpretation or how Section 709(e) permits its one-sided disclosure of employer position statements.

The protections for information and documents deemed “confidential” by an employer is limited. The Commission’s clear delineation of the information it will consider confidential is limited to sensitive medical information, social security numbers, confidential commercial or financial information, trade secrets information; non-relevant personally identifiable information of witnesses, comparators or third parties (for example, social security numbers, dates of birth in non-age cases, home addresses, personal phone numbers, personal email addresses, etc.), and any reference to charges filed against the employer by other charging parties. “Sensitive medical information” excludes the charging party’s medical information relating to the investigation. It is critical for employers to consult with labor and employment counsel to correctly categorize confidential information and justify such designation(s) to ensure confidentiality can be secured. “[T]he agency will not accept blanket or unsupported assertions of confidentiality.”

Further, upon receipt of information deemed confidential by an employer, the Commission has indicated that it will not withhold; rather, “EEOC staff may redact confidential information as necessary prior to releasing the information to a Charging Party or her representative.”

Employers need to be mindful of the Commission’s new procedure when responding to EEOC discrimination charges. Confidential information should be withheld (when permissible) or should be designated as “confidential.” Additionally, employers should keep in mind, when drafting position statements, that a charging party or his or her attorney may receive a copy of the position statement and any attachments.

If you have questions about this new practice by the EEOC, please contact Daniel Finerty, Oyvind Wistrom, or your Lindner & Marsack contact attorney at 414-273-3910.

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